TORONTO -- Mercedes-Benz Canada Inc. wants Canadians to get smart.

In fact, the auto maker thinks about 800 Canadians will get smart later this year when it begins offering its two-seater micro-compact cars here for the first time -- a move that both broadens Mercedes-Benz's product offering and heightens the growing competition in the small-car market in Canada.

Adding the smart brand to Mercedes-Benz traditional offerings of luxury sedans, coupes and sports cars moves the company deeper into mass market territory and considerably lower in price than the heart of its product offerings in the $30,000 and $40,000 range.

"I want to bring different people to the dealerships and make them familiar with the new styles of Mercedes," Marcus Breitschwerdt, president of Mercedes-Benz Canada, said in an interview yesterday at the Canadian International Auto Show in Toronto.

For some time, Mercedes-Benz has been studying the idea of expanding the market for smart -- the company is marketing it with the lower case s -- a unique, European city car that is highly fuel-efficient and will be easy to park in tight spaces.

"I personally fought for it," Mr. Breitschwerdt said. "I'm convinced it will be a success here."

"Canada is not a single market," he said, pointing to Vancouver, Montreal and Toronto as obvious cities where it will be appealing, but also to Calgary, Winnipeg and other large urban areas as natural markets.

The two-seater, just 2.5 metres long, will be sold in coupe and convertible versions beginning this fall with the coupe possibly starting as low as $15,000, Mr. Breitschwerdt said, and the convertible at less than $20,000, although final prices haven't been set yet.

It will be sold in a diesel version only with a 40-horsepower engine that consumes 3.5 litres of fuel for every 100 kilometres travelled.

Top speed is 120 kilometres an hour.

Mercedes' product lineup will now extend from the two-seater up to the $359,000 (U.S.) Maybach limousine with its built-in cigar humidor and the $450,000 SLR super sports car.

Mr. Breitschwerdt said he expects to sell 1,000 vehicles of the current version of the smart in 2005.

Smart has interchangeable door panels that allow owners to personalize their vehicles and change the colours whenever they want.

The cars are put together in a leading-edge factory in France, where parts suppliers, including Canadian giant Magna International Inc., assemble major components in a campus-like setting and ship to an assembly plant to which they're connected by conveyor belts.

The smart forfour, a sport utility vehicle version assembled at a factory in Brazil, will be sold in Canada later this decade.

"There's definitely a market for this in Canada," said industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. in Richmond Hill, Ont. "There's a market for any product that's unique."

It's a European-style vehicle that will do better in Canada than the United States, Mr. DesRosiers said. That's in part because gas prices in Canada are much closer to European levels, and Canadians buy proportionately more compact and subcompact cars than Americans. Those two segments combined racked up sales of 471,000 cars last year, or 29.5 per cent of the entire Canadian vehicle market.

South of the border, mid-sized cars represent the largest segment, followed by pickup trucks.

The competition in the subcompact segment in Canada has grown in recent years as Toyota Canada Inc. and General Motors of Canada Ltd., try to recapture market share taken by two South Korean-based auto makers, Hyundai Auto Canada and Kia Motors Canada.